Additional Requirement for a Bid Protest

Competitive Prejudice

In order to win a bid protest, it isn’t enough for a protester to show that an agency has made an error (violation of law, regulation or procedure), no matter how egregious, in conducting a procurement. At both the Government Accountability Office and the Court of Federal Claims (“COFC”), the protester must show “competitive prejudice” in order to have its protest sustained and win. Competitive prejudice is necessary to show that a protester is an “interested party,” and even where the protest is made to the contracting agency, the protester must establish that it is an “interested party” and show “competitive prejudice.” FAR 33.103(d)(1)(vii). This blog discusses competitive prejudice, and explains a recent COFC case, Precision Asset Management Corp., No. 15-1495C (Fed. Cl. Feb. 26, 2016), where the court found for good reason that there was no competitive prejudice, and dismissed the case.

The COFC Formulation of Competitive Prejudice: The Court says this:

To prevail in a bid protest, a protester must show a significant, prejudicial error in the procurement process. To establish prejudice, a protester is not required to show that but for the alleged error, the protester would have been awarded the contract. Rather, the protester must show “that there was a substantial chance it would have received the contract award but for that error.”Alfa Laval Separation, Inc. v. United States, 175 F.3d 1365, 1367 (Fed. Cir. 1999). (internal citations omitted).

A further example shows the court philosophy here:

To establish prejudice, a protester is not required to show that but for the alleged error [in the procurement process], the protester would have been awarded the contract. []. Such a rule would make it virtually impossible for a protester ever to prevail, no matter how egregious the error in the procurement process. On the other hand, a showing of a mere possibility that the protester would have received the contract but for the error is inadequate to show prejudice. If that were sufficient, the requirement of prejudice would be virtually eliminated. The proper standard lies between these polarities.[]We think that the appropriate standard is that, to establish prejudice, a protester must show that, had it not been for the alleged error in the procurement process, there was a reasonable likelihood that the protester would have been awarded the contract.